New from Prudential: Level Term Life to Age 65

What happens when your life insurance will not pay? Many times, this is due to exclusions which define specific items or circumstances that exclude beneficiaries from being paid upon your death. This is why everyone who owns a life insurance policy needs to read the fine print. States also differ when it comes to rules for each.

First, there is always a contestable period, which includes two years from the time the policy was issued. Insurance companies do have the right to cancel the coverage or deny a claim during that period if they find that a mistake occurred on the application. This is an exclusion with all policies.

The other common life insurance exclusions cover drug or alcohol abuse and anything illegal.

Suicide can be complicated and the event will not provide benefits if the death happens in the first two years. If the death was questionable, this information is usually decided by a court. However, let’s say in the third year of owning a policy, the owner commits suicide. The insurance company must pay no matter what.

If you are a mountain climber and you have an exclusion in your policy that will not pay for mountain climbing, this is a problem. You need to be honest about your hobbies and talk to a professional that can make sure that nothing is left out when you apply for a life insurance policy.

Most life insurance companies will cover those flying on a commercial airlines because this is not considered high risk. However, those killed in a private plane crashes may have a problem with the company paying the death benefit, especially if the pilot had a chronic illness and should not have been flying in the first place. Aviators can get life insurance but at a much higher cost.

War-related causes can also be an exclusion to your policy. Usually the clause is added during the time of war and removed at the end of war.

Life insurance policies have improved dramatically over the years at decreasing the number of exclusions. But they can keep a death benefit from being paid to beneficiaries. Therefore, it is important to talk with a life professional to prevent your loved ones from any financial disaster that can come at anytime.